Question 01

(a) Explain the roles of a Harbor, Port and a Cargo Handling Terminal (12
Marks)

1. Harbor:

 Definition: A harbor is a sheltered area of water where ships can dock

safely. It provides protection from winds, waves, and currents, making it a
suitable location for ships to anchor and carry out loading/unloading
operations.
 Roles:
o Offers safe anchorage to ships.
o Protects vessels from rough weather.
o Facilitates safe approach and departure of ships.
o May be natural (e.g., Trincomalee Harbor) or artificially constructed
with breakwaters.

2. Port:

 Definition: A port is a location on the coast that includes one or more

harbors and facilities where ships load and unload cargo or passengers.
 Roles:
o Supports international and domestic trade.
o Includes infrastructure like piers, warehouses, and customs offices.
o Provides logistical, administrative, and repair services.
o Ensures smooth flow of cargo and passenger traffic.

3. Cargo Handling Terminal:

 Definition: A terminal is a specialized facility within a port that handles

specific types of cargo.
 Roles:
o Ensures efficient movement of cargo from ship to shore and vice
versa.
 o Types include container terminals, bulk terminals, and Ro-Ro
terminals.
o Equipped with cranes, storage yards, IT systems, and safety
equipment.
o Handles documentation and customs formalities.

(b) Briefly explain the importance of having border hinterland and effectively
connected fore- land for a commercial port (13 Marks)

1. Border Hinterland:

 Definition: The inland area served by a port for the movement of cargo to
and from the port.
 Importance:
o Provides the cargo base for the port’s import and export activities.
o Enhances the trade potential by supporting industries, manufacturing,
and agriculture.
o Efficient road, rail, and inland waterway connectivity reduces
transportation costs and delays.
o Helps in economic development of the region.

2. Foreland:

 Definition: The overseas or maritime area with which the port has direct
shipping links.
 Importance:
o Extends the port’s reach to international markets.
o Determines the competitiveness of the port in global trade routes.
o Efficient maritime connectivity attracts shipping lines and
transshipment business.

3. Combined Importance:

 Ports with well-connected hinterlands and forelands operate more

efficiently.
  Better cargo flow, fewer delays, and lower costs.
 Encourages FDI and strengthens the logistics value chain.

Question 02

(a) Stakeholders in the port and shipping scenario (10 Marks)

Stakeholders in the port and shipping industry are individuals, organizations, or

entities that have a direct or indirect interest, responsibility, or influence in the
operations, development, and regulation of port and maritime activities.

1. Port Authorities – Manage and regulate port operations (e.g., SLPA).

2. Shipping Lines – Operate cargo and passenger vessels (e.g., Maersk, MSC).
3. Terminal Operators – Operate specific terminals within a port.
4. Customs – Regulate cargo, ensure compliance, and collect duties.
5. Ship Agents – Represent shipping lines in port-related matters.
6. Freight Forwarders – Plan and coordinate cargo movement.
7. Clearing and Forwarding Agents – Handle cargo documentation and
clearance.
8. Marine Insurers – Provide risk coverage for ships and cargo.
9. Transport Operators – Handle inland transportation.
10.Importers/Exporters – Trade parties who use port services.

(b) Briefly explain the roles of Customs, Ship operators/lines, Ship’s agents,
Marine insurance, clearing & forwarding agents highlighting their
contribution (15 Marks)

1. Customs:

 Control entry and exit of goods.

 Prevent illegal trade.
 Collect tariffs and taxes.
 Facilitate trade through systems like ASYCUDA.

2. Ship Operators/Lines:
  Manage and operate cargo ships.
 Schedule routes and freight pricing.
 Provide capacity for import/export.

3. Ship Agents:

 Coordinate ship arrival, berthing, and departure.

 Handle documentation, crew matters, and local services.

4. Marine Insurance:

 Provide coverage against risks like damage, loss, piracy.

 Promote confidence in global trade.

5. Clearing & Forwarding Agents:

 Prepare and submit customs documents.

 Arrange inland transport and delivery.
 Ensure cargo reaches destination legally and efficiently.

Question 03

(a) Five main operational activities of a port/terminal (10 Marks)

Port and terminal operations involve a range of activities that ensure the smooth
movement of cargo, vessels, and supporting services. These activities are essential
to ensure that ships are handled efficiently and cargo is moved safely and quickly.

1. Vessel Scheduling and Berthing: Allocating berths to incoming vessels

and ensuring smooth navigation.
2. Cargo Loading and Unloading: Using cranes and forklifts to transfer cargo
between ship and shore.
3. Storage and Warehousing: Temporarily storing goods in yards, sheds, or
bonded warehouses.
 4. Customs Clearance: Cargo inspection, documentation, and compliance
with legal requirements.
5. Intermodal Transfer: Moving cargo to/from rail, road, or inland waterways
for final delivery.

(b) Describe how the port value chain above activities contributes to the
efficiency and effectiveness of port operations meeting customer requirements
(15 Marks)

 Fast berthing and turnaround reduces demurrage costs.

 Timely cargo handling ensures on-time delivery.
 Smart warehousing prevents damage and loss.
 Efficient customs clearance reduces bottlenecks.
 Intermodal connectivity offers seamless supply chains.
 All lead to reduced logistics cost, improved trade flow, and high customer
satisfaction.

Question 04

a) discuss the types of cargo traded in the world and introduce the types of
ships designed carry them (15 Marks)

Cargo refers to the goods carried by ships for commercial trade. Different cargo
types require different ship designs to ensure safety, efficiency, and suitability for
transport.

1. Containerized Cargo

Cargo that is packed in standardized containers (typically 20ft or 40ft units) for
easy handling and transfer.

Container Ship - built to carry containers in holds and on deck. Equipped with
cell guides and container securing systems.

Examples: Electronics, clothing, machinery, food products.

2. Dry Bulk Cargo

Unpackaged solid goods transported in large quantities, usually poured directly

into ship holds.

Bulk Carrier - Designed with large box-like holds for cargo such as coal, iron ore,
or grain. Includes gearless (need port cranes) and geared (own cranes) types.

Examples: Coal, cement, grains, fertilizers.

3. Liquid Bulk Cargo

Fluids and liquefied materials transported in tanks.

Tanker - Sub-types: Oil tankers, chemical tankers, LNG (liquefied natural gas)
carriers. Equipped with pumps and pipelines for loading/unloading.

Examples: Crude oil, petrol, chemicals, edible oils, LNG.

4. Break Bulk Cargo

Cargo that is loaded individually and not in containers or bulk. Usually heavy,
oversized, or packaged in boxes, drums, or pallets.

General Cargo Ship / Multipurpose Ship - Equipped with cranes and multiple
decks. Suitable for mixed cargo types.

Examples: Steel bars, machinery, timber, bags of cement.

5. Ro-Ro (Roll-on/Roll-off) Cargo

Wheeled cargo that can be driven on and off the ship via ramps.

Ro-Ro Ship (Roll-on/Roll-off Vessel) - Designed with ramps and internal decks to
transport vehicles. Fast loading and unloading.

Examples: Cars, trucks, buses, heavy construction equipment.

6. Refrigerated (Perishable) Cargo

Temperature-sensitive goods requiring cold storage during transit.

Reefer Ship - Built with insulated holds and refrigeration units. Maintains specific
temperature ranges.

Examples: Fruits, vegetables, meat, fish, pharmaceuticals.

7. Project Cargo / Heavy-Lift Cargo

Large, heavy, or complex cargo that requires special handling due to its size or
weight.

Heavy-Lift Ship / Project Cargo Vessel - Equipped with large cranes or float-
on/float-off decks. Designed to carry wind turbines, transformers, generators, etc.

Examples: Oil rigs, locomotives, industrial machines.

(b) Free Zones and FDI (10 Marks)

Free zones, also known as Free Trade Zones (FTZs) or Special Economic Zones
(SEZs), are specially designated areas near ports, airports, or borders where
businesses enjoy tax benefits, regulatory ease, and customs privileges. Their
strategic function in attracting Foreign Direct Investment (FDI) has a direct and
positive impact on port development and trade activities.

1. How Free Zones Attract Foreign Investment

 Incentives for Investors:

o Exemption from customs duties, VAT, and certain local taxes.
o Ease of business registration and operation.
o Permission for 100% foreign ownership.
o Repatriation of profits without restrictions.
 Low Operational Costs:
o Cheaper import and export processes.
o Duty-free access to raw materials and equipment.
o Streamlined procedures reduce delays and costs.
 Favorable Location:
o Proximity to deep-sea ports and logistics corridors.
 o Quick access to global shipping routes.
o Ideal for re-exporting and transshipment business.

2. Benefits to Port Business from Free Zones

 Increased Cargo Volumes:

Industries in free zones rely on ports for importing raw materials and exporting finished
goods, which increases container throughput and ship calls.
 Boosts Transshipment Activities:
Free zones encourage re-export, which promotes transshipment cargo and positions
ports as regional hubs.
 Improved Infrastructure Development:
To support free zone industries, ports invest in better terminals, warehousing, and IT
systems, enhancing their global competitiveness.
 Creation of Logistics Clusters:
Free zones attract logistics companies, freight forwarders, and shipping lines, helping
develop a complete port ecosystem.
 Job Creation and Economic Growth:
More businesses near ports create employment and stimulate regional economies, which
leads to reinvestment in port facilities.

 Free zones offer tax/duty incentives.

 Allow import, process, and re-export.
 Attract foreign investors and multinational companies.
 Increase port activity and employment.
 Example: Colombo Port's Free Zone near CICT.

Question 05

(a) Present challenges (10 Marks)

For Ship Operators:

 Rising fuel prices.

 Complying with IMO environmental regulations.
 Container shortages and schedule reliability.
For Ports/Terminals:

 Congestion and delays.

 Limited infrastructure.
 Cybersecurity threats.
 Labour disputes.

(b) Terminal Service Agreement – Features (5 Marks)

 Defines roles and responsibilities of port and shipping line.

 Sets pricing, service levels, volume expectations.
 Includes terms for dispute resolution.
 Encourages long-term cooperation.

A Terminal Service Agreement (TSA) is a formal contract between a shipping line (or ship
operator) and a port terminal operator. It outlines the terms and conditions under which
terminal services are provided, such as vessel handling, cargo operations, and equipment use.

Key Features of a TSA:

1. Scope of Services

 Specifies the services the terminal will provide, such as:

o Vessel berthing
o Cargo loading and unloading
o Storage, yard handling
o Equipment usage (e.g., cranes, trucks)

2. Volume Commitments

 Defines the minimum cargo volume or number of vessel calls the shipping
line agrees to bring.
 May include incentives (discounts) for higher volumes.

3. Tariffs and Charges

 Lists applicable handling fees, storage costs, and service charges.

 May include volume-based discounts or performance-based pricing.
4. Performance Standards

 Sets Key Performance Indicators (KPIs) such as:

o Crane productivity (moves per hour)
o Berth window reliability
o Turnaround time of vessels
 Ensures service quality and efficiency.

5. Duration and Renewal

 States the contract period (usually 1 to 5 years).

 Includes terms for renewal, extension, or termination.

6. Responsibilities and Obligations

 Clarifies duties of both parties:

o Terminal: Provide equipment, staff, safety, timely service.
o Shipping Line: Provide schedule updates, adhere to booking
requirements.

7. Dispute Resolution and Force Majeure

 Specifies how disputes are resolved (e.g., arbitration, legal jurisdiction).

 Includes force majeure clauses for events like natural disasters, strikes, or
war.

8. Confidentiality

 Protects sensitive commercial terms, especially pricing and volume

agreements.

(c) Port Infrastructure and Superstructure (10 Marks)

Infrastructure:

These are the foundational physical structures built to support port operations,
usually funded and maintained by governments or port authorities.
 Facility Function
Fixed locations where ships are moored for
Berths/Quays
loading/unloading.

Barriers to protect the harbor from waves and

Breakwaters
storms.

Navigation Channels Dredged pathways that allow safe access for ships.

Turning Basins Open water areas for ships to maneuver and turn.

Access Roads and Railways Provide inland connectivity for cargo transport.

Port Entrance and Security

Control access for vehicles and personnel.
Gates
Water, power, sewage, fuel pipelines for port
Utilities
operations.

Superstructure:

These are the operational and functional facilities installed on top of the port
infrastructure, typically used directly in cargo handling and logistics.

Facility Function
Container Cranes (Quay Cranes, Used for loading/unloading containers from
RTGs, STS) ships.
For moving and stacking cargo within
Forklifts & Reach Stackers
terminals.
For temporary storage of cargo (including
Warehouses & Transit Sheds
bonded areas).
Designated spaces for container stacking and
Container Yards & Open Storage
cargo staging.
Weighbridges & Scanners For cargo weighing and security scanning.
Port Operating Systems (TOS, Software for managing vessel, yard, and
PCS) cargo operations.
Lighting & CCTV Systems Ensure 24/7 operations and port security.
Question 06

(a) Port Ownership and Administration Models (12 Marks) Briefly explain
the different models of Port Ownership and Administration with relevant
examples

Ports can be owned, managed, and operated under different models based on how
responsibilities are shared between the public sector (government/port authority)
and private sector (operators, investors). The choice of model affects efficiency,
investment, regulation, and service delivery.

1. Public Service Port Model

Definition:
In this model, the government or port authority owns and operates all port
services – including infrastructure, superstructure, cargo handling, and labor.

Characteristics:

 Port authority performs both regulatory and operational roles.

 Minimal private sector involvement.
 Services may be inefficient due to bureaucracy and lack of competition.

Example:

 Sri Lanka Ports Authority (SLPA) – traditionally operated under this

model.
 Chittagong Port, Bangladesh

2. Tool Port Model

Definition:
The port authority owns the infrastructure and superstructure but leases out
equipment to private operators who handle cargo operations.

Characteristics:
  Government owns and maintains port assets.
 Terminal operators use government-owned equipment.
 Shared responsibilities may cause inefficiencies or conflicts.

Example:

 Port of Marseille, France

 Partially implemented in older terminals of Indian ports

3. Landlord Port Model ✅ (Most widely used today)

Definition:
The port authority owns the land and infrastructure, while private companies
lease terminals and invest in superstructure (cranes, equipment) and operate
services.

Characteristics:

 Public-private partnership.
 Encourages private investment and competition.
 Port authority remains as regulator and landlord.

Example:

 Port of Colombo (SAGT and CICT terminals)

 Port of Rotterdam, Netherlands
 Port Klang, Malaysia

4. Private Service Port Model

Definition:
A fully private entity owns, develops, and operates all port functions including
infrastructure, cargo handling, and administration.

Characteristics:

 Rare and usually under long-term concession or privatization.

  Government may regulate safety and environment only.
 High efficiency but risk of monopoly if not regulated.

Example:

 Port of Felixstowe, UK
 Privately managed container terminals in Panama

Model Infrastructure Superstructure Operations Ownership Example

Public Chittagong
Service Public Public Public Government Port, SLPA
Port (historical)
Port of
Tool Port Public Public Private Mixed
Marseille
Colombo
Landlord Port (CICT,
Public Private Private Shared
Port SAGT),
Rotterdam
Private Port of
Private Private Private Private
Port Felixstowe

(b) Role of SLPA and Colombo Port (13 Marks)

Sri Lanka Ports Authority (SLPA):

 Regulates and manages national ports.

 Invests in infrastructure and policy planning.
 Ensures port security, tariffs, and coordination.

Port of Colombo:

 Major regional transshipment hub.

 Strategically located on East-West shipping route.
 Home to three key terminals (JCT, SAGT, CICT).
 Handles majority of South Asian container traffic.
Sri Lanka Ports Authority (SLPA) – General Role

The Sri Lanka Ports Authority (SLPA) is the government body responsible for
managing, developing, and regulating all commercial ports in Sri Lanka.
Established in 1979, SLPA plays a central role in national logistics, trade
facilitation, and maritime infrastructure.

Key Roles of SLPA:

1. Port Management and Operation:

o Owns and operates major terminals in Sri Lanka, especially the Jaya
Container Terminal (JCT).
o Manages cargo handling, storage, and vessel services.
2. Infrastructure Development:
o Invests in expanding berths, deepening channels, and upgrading port
facilities.
o Leads development projects in Colombo, Hambantota, Galle, and
Trincomalee.
3. Regulation and Policy Implementation:
o Regulates port tariffs, safety, and environmental standards.
o Implements government port policies and international maritime
regulations.
4. Public-Private Partnerships:
o Collaborates with global terminal operators (e.g., CICT, SAGT) under
the Landlord Port Model to attract foreign investment and improve
competitiveness.
5. Strategic Trade Facilitation:
o Supports import/export activities, transshipment, and value-added
logistics.
o Enhances Sri Lanka’s position in the global shipping network.

Port of Colombo – Role as a Regional Hub Port

The Port of Colombo, managed by SLPA, is Sri Lanka’s busiest and most
important port, and functions as a major regional transshipment hub in South
Asia.
Key Features and Contributions:

1. Strategic Location:
o Positioned along the main East-West international shipping route,
ideal for transshipment between Asia, the Middle East, and Africa.
2. High Transshipment Volume:
o Over 75% of container volume is transshipment cargo, primarily
for India, Bangladesh, and Maldives.
o Acts as a feeder port connecting smaller regional ports to global
shipping lines.
3. Modern Terminals:
o Home to three main terminals: JCT (SLPA-operated), SAGT
(private), and CICT (Chinese investment).
o Deep-water capacity enables handling of ultra-large container vessels
(ULCVs).
4. Efficient Operations:
o Competitive turnaround times and digital systems (e.g., Terminal
Operating Systems).
o ISO-certified operations and internationally ranked in port
performance.
5. Foreign Investment & Collaboration:
o Partnerships with global operators like China Merchants Port, John
Keells Holdings, and APM Terminals.
o Enhances service quality and increases container throughput